FTX claims have just begun, but the impact of asset liquidation is coming to an end
Original - Odaily
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On March 3, FTX Digital’s Joint Official Liquidators (JOL) notified customer and non-customer creditors to submit proof of claims or claims in liquidation through the FTX Digital claims portal. Eligible customer and non-customer creditors must promptly file claims at FTX Digital The deadline to submit claims through the portal is May 15, 2024.
As soon as this news comes out, does it mark the end of the FTX bankruptcy that lasted nearly one and a half years, starting from the launch of bankruptcy liquidation procedures by FTX and its subsidiaries on November 11, 2022, to now allowing creditors to submit proof of claims?
Odaily will use this article to provide you with a comprehensive analysis of the difficulties still faced by FTX’s bankruptcy and what impact it will have on the market.
FTX liquidation claims are just the beginning
In fact, submitting a proof of claim can only represent the official start of FTX’s liquidation claim, but it is far from being completed. The most important issue, how to pay compensation to customer creditors, has not yet been determined.
However, judging from court documents as early as December 27, 2023, FTX sought court approval to estimate its customers’ digital asset claims in U.S. dollars. At the same time, FTX also proposed to set the compensation price on November 11, 2022, based on the price on that day. Look, Bitcoin is at 16871 USDT, Ethereum is at 1258 USDT, SOL is at 16 USDT, etc.
From a certain perspective, this pricing method means that the creditors cryptocurrencies in FTX will be passively sold at a relatively bottom price in the bear market, and subsequent increases will have nothing to do with the creditors. However, the legal document has an appeal period until January 11, 2024. After the deadline expired, about 80 creditors submitted letters opposing the application.
Creditor Sunil Kavuri, one of the more prominent clients, tweeted a boycott and called on creditors to oppose the proposal.
A coalition of FTX 2.0 creditors has also called for a letter to the judge opposing the proposal.
From the perspective of solvency, it is reasonable to use USD pricing to compensate customer creditors, because at the current currency price, it is not realistic to use cryptocurrency for compensation, and FTX’s token assets are not sufficient to repay. However, the compensation price is set on November 11, 2022, and Bitcoin is repaid to creditors at a price of US$16,871 per coin. Creditors must be unwilling to accept it, let alone creditors holding SOL. As of today, the price of SOL has exceeded 130 USDT, with a compensation price of US$16 per coin, cannot offset the loss of creditors.
The problem of how to calculate compensation that Mentougou has experienced is also a big obstacle blocking FTX’s bankruptcy. However, on March 15, FTX Digital will hold its first creditors meeting, which may discuss this incident, and Odaily will continue to report.
Will FTX liquidation claims promote the market?
Since September 14, 2023, when the court approved the FTX asset liquidation plan, the crypto market has been flooded with rumors that FTX assets are about to be sold off. But as of today, BTC has exceeded 65,000 USDT, and SOL has returned to above 130 USDT, as if the FTX asset liquidation zone There was no expectation of a sudden sell-off, and the market did not have a reaction because of it. Instead, it promoted the price rebound of the crypto market to a certain extent.
Among FTX assets, BTC, ETH and SOL account for a total of 72% of the asset value. According to court documents, the sale of such assets requires advance application and cannot be directly sold to the market, draining market liquidity, and FTX will be lower than the market price. No one wants crypto assets to plummet. Therefore, there is a high probability that FTX will sell its assets through OTC. As for some smaller assets, according to the trend of FTX assets, most of them are transferred to market makers to help them sell in a reasonable way.
And 3AC Lianchuang Su Zhu posted on the X platform, Events like the FTX/Alameda sale of SOL, while seemingly negative, are actually a very bullish thing as it disperses the supply of the token and provides investors waiting to get in on the money. Opportunity to enter the market at a discount.”
From the data point of view, as of February 20, according to Lookonchain statistics, the FTX/Alameda address currently holds a total of US$1.19 billion in crypto assets, including 266.84 million FTT (approximately US$482.98 million), 25 million WLD (approximately US$482.98 million), 168 million U.S. dollars), 105.47 million BIT (approximately 83.33 million U.S. dollars), 1,500 BTC (approximately 77.64 million U.S. dollars), 140.2 million STG (approximately 71.36 million U.S. dollars).
Looking back at the time when FTX first started liquidating assets, please read for detailsWhen the FTX token asset liquidation proceeds, how much impact will it have on the market? 》, the value of the overall held assets dropped from US$3.4 billion as of August 31 to US$1.19 billion, which did not take into account the increase in some assets during this period. Overall, the liquidation of FTX assets is coming to an end.
As Su Zhu just mentioned, FTX liquidation will decentralize the supply of tokens and redistribute trading chips, which is more conducive to the development of the project. Judging from the decline in overall FTX/Alameda positions, the FTX bankruptcy incident will have minimal impact on the subsequent market.
in conclusion
The FTX bankruptcy has reached the first stage of creditor claims, but there are still unresolved issues regarding compensation standards. Users also need to actively cooperate with the FTX liquidator and submit the corresponding claim proof as soon as possible. Please read the specific claim steps for details.Official Guide: 5 Steps to Teach You How to Make an FTX Liquidation Claim。
